Infrastructure and Growth in Africa
The goal of the paper is to provide a comprehensive assessment of the impact of infrastructure development on growth in African countries. Based on econometric estimates for a sample of 136 countries from 1960-2005, the authors evaluate the impact...
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090430144152 http://hdl.handle.net/10986/4117 |
| Summary: | The goal of the paper is to provide a
comprehensive assessment of the impact of infrastructure
development on growth in African countries. Based on
econometric estimates for a sample of 136 countries from
1960-2005, the authors evaluate the impact on per capita
growth of faster accumulation of infrastructure stocks and
of enhancement in the quality of infrastructure services for
39 African countries in three key infrastructure sectors:
telecommunications, electricity, and roads.Using
an econometric technique suitable for dynamic panel data
models and likely endogenous regressors, the authors find
that infrastructure stocks and service quality boost
economic growth. The growth payoff of reaching the
infrastructure development of the African leader (Mauritius)
is 1.1 percent of GDP per year in North Africa and 2.3
percent in Sub-Saharan Africa, with most of the contribution
coming from more, rather than better, infrastructure. Across
Africa, infrastructure contributed 99 basis points to per
capita economic growth, versus 68 points for other
structural policies. Most of the contribution came from
increases in stocks (89 basis points), versus quality
improvements (10 basis points). The findings show that
growth is positively affected by the volume of
infrastructure stocks and the quality of infrastructure
services; simulations show that our empirical findings are
significant statistically and economically. Identifying
areas of opportunity to generate productivity growth, the
authors find that African countries are likely to gain more
from larger stocks of infrastructure than from enhancements
in the quality of existing infrastructure. The payoffs are
largest for telephone density, electricity-generating
capacity, road-network length, and road quality. |
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